Fire and Emergency funding system evaluation

Minister Brooke van Velden has asked the Department of Internal Affairs to look into whether there are better ways to fund Fire and Emergency New Zealand [FENZ] than the current insurance levy system.  

“95% of Fire and Emergency’s income is collected from levies on property insurance protecting against the risk of fire. The Fire Service levy was introduced in 1975 and, despite changes to the core services FENZ delivers, is still the funding model used today,” says Ms van Velden.  

“The Fire and Emergency New Zealand Act 2017 added a number of non-fire related functions for FENZ to perform, such as responding to medical emergencies, maritime incidents, and severe weather events and disasters. Given the widened mandate, there is a valid question about whether this model is fair for levy payers and fit for purpose.   

From 1 July 2025 to 31 March 2026, only 59% of incidents FENZ responded to, including false alarms, were fire related based on recorded data. 

“Given the significance of the levy, it is timely to consider whether its design and operation remain appropriate, or whether improvements are possible.” 

Another longstanding issue with the model is the issue of free-riding, where people do not insure their property but still rely on the service. 

The Department of Internal Affairs will engage with targeted stakeholders and consider any problems with the current system and alternative approaches, taking into account feasibility of implementation. 

“It is important that the revenue collected to fund Fire and Emergency is reliable, fit for purpose and future proof. This work will give us greater understanding about whether insurance is the only feasible collection method, or if there are other practical alternatives. I look forward to seeing feedback from the targeted consultation. 

This work will not affect the new levy rates, which have been set for the next three years starting on 1 July 2026. It is designed as a resource that can be drawn on in any future work on regulatory or legislative settings for fire and emergency services. ...